Pa.'s drop in Medicaid rolls stirs controversy

Marie Stopa says son Marek, 10, could have avoided tripsto the emergency room over asthma with continued coverage.

By Don Sapatkin, Inquirer Staff Writer

Posted: December 15, 2011

Since August, the Corbett administration has cut off more than 150,000 people - including 43,000 children - from medical assistance in a drive to save costs. That purge far exceeds what any other state has tried, health policy experts say, and officials may be walking a fine line between rooting out waste and erecting barriers to care for the poor and disabled.

When most states were experiencing flat or rising Medicaid enrollment from the economic downturn, stepped-up eligibility reviews in Pennsylvania began producing a decline over the summer. The pace of cuts picked up in November, with 90,000 cases, or 4 percent, dropped in a single month. In New Jersey, enrollment increased by 391 the same month.

The Department of Public Welfare in Harrisburg says most of the people cut were dead, had moved out of state, or were found to be ineligible, but it could provide no breakdown. Advocacy groups, clients, and representatives for caseworkers paint a different picture. Pressure to quickly review a backlog of files and close cases overwhelmed the system, they say, as reams of paperwork were lost and computer programs automatically ended benefits when patients' responses had not been entered by preset deadlines.

The Pennsylvania experience, while extreme, illustrates the difficulty of reining in increases in health-care costs nationwide. For the short term, the cost of providing public insurance ballooned as people lost their jobs and employer-provided benefits, while states' belt-tightening reduced the workforce that processes applications.

Marie Stopa of Holmesburg received a letter Sept. 15 saying her four children would be cut off Sept. 19 if renewal paperwork was not received. She says she sent it the next day, but benefits were cut off anyway. Her 10-year-old son, Marek, has landed in emergency rooms twice since then for asthma attacks Stopa believes would have been avoided had he remained on the preventive medication she can no longer afford.

The $2,100 in ER bills is unpaid. The state will retroactively cover the costs if her insurance is restored, which Public Citizens for Children and Youth, the advocacy group on her case, believes will happen. Advocates say this case is an example of how attempts to save money may end up costing the state more instead.

Stopa has now submitted paperwork four times - her receipts do no good, she said, because caseworkers still can't find the documents, which are accepted only on paper or fax. A school social worker accompanied her to the welfare office on Frankford Avenue. "They told him to butt out," Stopa said. "He went with me because every time I go, I have to cry."

Advocacy groups say they have heard hundreds of such reports and recount the same experiences. Some say they put calls on speaker phone and randomly dial welfare office numbers until somebody answers. They say most cases they handled were eventually reinstated, although often with gaps in coverage that in a few cases posed danger.

But the vast majority of recipients don't seek legal help.

"If people don't have an immediate medical need, they may not know that they have lost their coverage," said Ann Bacharach, an eligibility specialist for the Pennsylvania Health Law Project.

In Philadelphia, which has by far the heaviest Medicaid caseload in the state, the rolls were down by 10 percent for adults and 4 percent for children, or 40,300 overall, in November compared with August. Suburban rolls lag by a month and vary widely.

Chester County, where pockets of poverty are surrounded by what is otherwise the wealthiest Pennsylvania county, had by far the biggest drops on a percentage basis - 7.7 percent through October, before the pace of cuts more than doubled statewide.

Eighteen percent of Pennsylvania's residents receive some form of Medicaid (down from 18.5 percent in August), the joint state-federal insurance program for the poor and disabled. The program is the main reason the Department of Public Welfare eats up 41 percent of the state budget.

The budget the General Assembly approved in June orders DPW Secretary Gary D. Alexander to make major cuts this year: $271 million through specifics such as limiting dental services and increasing some co-pays, plus $200 million by reducing fraud, waste, and abuse.

"There is simply no room for any waste, fraud or abuse," Alexander said in a Nov. 21 news release. The release noted, without attribution, that as a result of new enforcement policies and analytic tools, "more than 100,000 ineligible welfare cases - many involving clients who died or moved out of state - have been eliminated from the rolls, saving taxpayers more than $34 million."

But Tricia Brooks, an assistant research professor at Georgetown University's Health Policy Institute, said, "There is very little evidence of beneficiary fraud and abuse" in medical assistance programs nationwide. A federal report last year found a 4 percent error rate in Pennsylvania's Medicaid program, half the national average.

Around the country, Medicaid numbers have shown "little blips from month to month," Brooks said, but "nothing that close to what Pennsylvania is seeing."

In interviews late Wednesday, two DPW officials could not immediately say how many of the 100,000 cases Alexander cited were of people who had died or moved.

They insisted, however, that there had been no changes in Pennsylvania's procedures and dismissed reports of delays, timeouts, and understaffing. Clients are given 15 days to respond to requests for information and, if nothing is returned, are then sent 15-day cancellation notices, but no additional action is taken until that time is up, said Lourdes Padilla, an acting deputy secretary.

"We conduct re-determinations with sensitivity . . . and accommodate as much as we can to the clients' needs," she said. "Nothing has changed."

Federal law prohibits states from changing eligibility or even procedures that might be more difficult for clients to meet. Several states have recently been sued and agreed to change processes that had, for example, caused automated computer closures similar to what advocates say is happening here, said Marc Cohan, director of litigation for the National Center for Law and Economic Justice.

Waste, fraud, and abuse are popular targets nationwide, especially for programs serving the poor.

"I think the Department of Public Welfare is under political pressure to sort of reaffirm these ... numbers that have been thrown out there," said Bill Bacon, legislative director for Service Employees International Union Local 668, which represents caseworkers. The state has ordered workers not to talk with the press.

Most advocacy groups are more cautious about attributing intention. They believe that three things contributed to bringing the system down:

Budget cuts during the Rendell administration and a hiring freeze under Gov. Corbett have reduced the number of caseworkers by 15 percent to 20 percent, while the number of Medicaid recipients has increased by more than 50 percent, about one million cases.

Early in the summer, the state ordered manual reviews of hundreds of thousands of backlogged cases within six weeks. Workers were told to close cases "for any technical reason" and to quickly "send out cancellation notices" if any information was missing, said Donna Scarboro, business agent for Local 668 in Philadelphia. Padilla, the state official, denied this.

When hurricanes and flooding hit at the end of the summer, thousands of victims were directed to the same county Assistance Offices for disaster aid. A reporter at one point counted 330 people in line at a North Broad Street office.

"I don't think anyone grasped the shortage of staff in these offices," said Scarboro, a former caseworker. "A large proportion of people who were told they were ineligible are in fact eligible."

While Pennsylvania's Medicaid numbers plummeted, statistics that normally follow the same trend, such as subsidized school lunches and employment data, did not.

And when children on Medicaid lose eligibility due to a family's increased income, they are automatically transferred into the state's Children's Health Insurance Program because CHIP has higher limits. When Michael Froehlich, an attorney for Community Legal Services of Philadelphia, analyzed the data, he found that 43,407 children had lost Medicaid while only 272 were added to CHIP.

The Medicaid cuts have been largely invisible to the public - a sharp contrast with the protests and lawsuits that accompanied Corbett's decision in the spring to kill AdultBasic, the state's insurance program for low-income working adults, which was one-quarter the size of the total Medicaid cuts so far.

But advocacy groups said they have been sending the state, at its request, documentation of cases that were closed prematurely - evidence that theoretically could be used in a lawsuit. They also said they have asked the state to temporarily suspend case closures, as they said the Ridge administration did when similar problems occurred a decade ago on a much smaller scale.

Padilla said Wednesday that she had received no such evidence. "But there has been no change. So I don't see a need to stop what we have been doing," she said.

Another official, Ray Packer, agreed. "Any departure from that would be a violation of state and federal law," he said.